Returns to consumers over the last five years have faded relative to the Reserve Bank's interest rate activity, research shows.

While the Reserve Bank's official rate has dropped by 2% (or 200 basis points), average home loan rates have reduced by only 0.9%, while credit card rates have risen by 200 basis points.

The Australian Bankers' Association explained that disproportionate credit card interest is a result of the amount that lenders have to pay to fund their own credit, and the higher risk faced by lenders during this global financial crisis. Consequently, banks have had to revalue risk.

There is growing expectation that the Reserve Bank will cut central interest rates when the committee convenes in February. There is less optimism, however, that banks will pass on the full cuts to consumers. And what will be passed on to consumers is expected to affect mortgages rather than credit cards.

Consumers unhappy with their credit card rates could always consider a change. Balance transfer credit cards offer rates as low as 0% for a number of months, which allows consumers to reduce debts affordably. Meanwhile, a low rate credit card ensures a consistently low rate of interest compared to the higher rates offered by most other credit card types.

See our suggested credit card profile list here on CreditCard4U and see if you could make a better choice.  

Ben Smith